Electrical Equipment / Components & Telecoms

The growth rate of the international trade market is obvious. With the continuous disclosure of semi-annual reports by listed companies in the photovoltaic industry, the global module shipments in the first half of this year have also surfaced. The top four have all been released. JinkoSolar has shipped about 18.21GW. in the first place. Followed by Trina Solar and LONGi Green Energy, the gap between the two is very small, and JA Solar ranks fourth.

In 2020 and 2021, LONGi Green Energy's shipments continued to maintain the first place. However, in the first quarter of this year, JinkoSolar returned to the first position, and LONGi dropped to fourth. At that time, it ranked second and third. The competition between Trina Solar and JA Solar is very close. In the first half of the year, the number of module shipments was rearranged again. Jinko, TRW and LONGi all shipped more than 18GW, while JA Solar dropped to fourth place.

A common trend revealed by the semi-annual reports of the four major module manufacturers is that the industry-integrated capacity expansion is continuing to advance, and each manufacturer has set huge capacity targets. Jinko even bluntly stated that vertical integration capability is a necessary capability for photovoltaic companies to participate in future competition, which seems to have drawn a conclusion to the dispute over whether the industry integration or the specialization path is better. In addition, first-tier manufacturers are simultaneously expanding N-type production capacity while promoting integrated layout. It can be expected that the proportion of N-type product shipments will increase steadily.

Great contribution from overseas markets

One thing that the top four manufacturers have in common is that overseas markets have contributed a larger share. For example, in the first half of the year, overseas shipments of JA Solar's modules accounted for about 67%. The company said that while stabilizing major photovoltaic markets such as China, Europe, the United States, and Japan, it will actively deploy emerging markets such as Southeast Asia, Australia, Central America, South America and the Middle East.

JA said at the performance briefing that from the perspective of the third quarter, the delivery price of overseas modules has gradually increased. Recently, the price of newly signed distribution orders has been on the rise, and there will be a negotiation process with customers for large projects, especially long-term projects. In terms of regional demand, foreign countries are still slightly stronger than domestic ones. For example, some traditional mature markets have relatively strong demand and relatively high price acceptance.

According to JinkoSolar's module shipment destinations in the first half of the year, the European market accounted for the highest proportion, and China, Asia-Pacific and emerging market regions all contributed significantly. In the European market, the company's N-type TigerNeo series module products have achieved a large number of orders and a high premium level; in the Chinese market, the company has focused on the development and development of the distributed market while laying out large-scale projects, achieving rapid growth in shipments; In Latin America, India and other markets, the company achieved rapid growth by seizing market rotation opportunities through leading layouts.

An important variable in the overseas market this year is the United States. Since June last year, the United States has issued a WRO (withholding order), extended the 201 tariffs on solar cells and module products, and launched anti-circumvention investigations on photovoltaic products from four Southeast Asian countries; in addition, India has also raised tariffs on imported components and battery products from the second quarter of this year to reduce imports and promote local manufacturing.

LONGi Green Energy said that in the first half of the year, the US market was affected by WRO, anti-circumvention investigations, etc., and the cost of warehousing in Hong Kong increased more; in response to the changes, the company shifted its sales focus to Europe and other important markets. The long-term accumulation in aspects such as and channel layout has maintained a good competitiveness, and the overseas business is basically stable.

Trina Solar stated on the earnings conference call that the company's main challenges in the U.S. market are the supply chain and the traceability of silicon materials; the company's shipments in the U.S. market will return to normal in the second half of 2022, with a significant increase from the first half of the year. More than 2GW; it is expected that the company's normal market share level in the US market can be restored in 2023.

Regarding the sustainability of overseas demand, due to factors such as the concentration of holidays in the fourth quarter, the market is worried about the performance of the European market in the traditional off-season. In this regard, JA Solar believes that the possibility of a cold winter in Europe this year is very high, there will be a shortage of natural gas supply, and the price of electricity will be too high. At present, the demand in Europe in the fourth quarter of this year will be better than in previous years.

Synchronized implementation of integration and N-type expansion

In the semi-annual report, many manufacturers mentioned their forecasts for global module demand this year and next, and photovoltaics still maintain rapid growth. Trina Solar judges that the newly installed capacity will be about 280-300GW in 2022, and the demand for photovoltaic products in Europe due to the Russian-Ukrainian war has greatly increased; it is expected that the newly installed capacity will be between 380-400GW in 2023, an increase of 30%.

JA said that according to third-party data, the industry demand next year will be around 330GW to 340GW, but the company believes that there is still a possibility of upward revision, and it is expected to be between 350 and 400GW.

In the face of potential market demand, integrated production capacity layout is becoming the choice of more and more manufacturers. JinkoSolar has made it clear that vertical integration capability is a necessary capability for photovoltaic companies to participate in future competition. The company's 16GW large-size TOPCon cell production capacity, which was put into production at the beginning of the year, has reached its full production capacity in the second quarter. The second phase of Hefei's 8GW cell production capacity has been put into production, and the second phase of Jianshan's 11GW cell is also under construction.

In the context of the integration of first-tier photovoltaic manufacturers, N-type production capacity is another highlight of this layout. In fact, in the selection of next-generation battery technology, except LONGi, the other three unanimously chose TOPCon.

According to JA Solar's statement, TOPCon is currently relatively mature, and the company has invested a lot in research and development. In addition, the heterojunction has the possibility of mass production in 2 to 3 years, and the company's heterojunction pilot line has also been put into production. Perovskite, IBC and other technologies also have technical reserves. The situation of Tianhe is similar. The company said that after a comprehensive comparison, TOPCon is the best technology option for the current period.

JA Solar said that by the end of 2023, the company plans to have 27GW of N-type battery production capacity. Combined with the specific production time node and market demand for new products, it is initially estimated that N-type modules will account for about 1/3 of the 2023 shipment target. In addition, the N-type products are initially expected to have a premium of about 1 cent compared with the existing P-type products, and the cost is also slightly higher. The profitability level depends on the overall industry trend.

Faced with the demand for integration and N-type expansion, first-tier companies have generally increased their refinancing efforts. JA Solar announced the convertible bond issuance plan while disclosing the semi-annual report. The proposed fundraising will not exceed 10 billion yuan, which will be used for the 20GW crystal pulling and slicing project in Baotou, the 10GW high-efficiency battery and 5GW high-efficiency module project in Qujing, and the 10GW high-efficiency project in Yangzhou. battery project. According to the company, this move will help to establish a leading position in the industrial development of large-size N-type products.